News 1 December 2017

Cocoa Farmers in Ghana Experience Poverty and Economic Vulnerability

Cocoa Farmers in Ghana Experience Poverty and Economic Vulnerability

Cocoa farming is the backbone of Ghana’s economy. 800,000 small scale cocoa farmers make up 60% of the country’s agricultural base. However, despite their importance to Ghana’s development, many cocoa farming families live in poverty.

Cocoa farmers earn a per capita daily income of approximately USD $0.40-$0.45 on cocoa. This amounts to an annual net income of USD $983.12-$2627.81 and accounts for two thirds of cocoa farmers’ household income.

Several factors affect cocoa farmers’ capacity to earn high incomes. The majority of Ghana’s cocoa farmers are self-employed and operate small-scale farms of 2 to 5 hectares. Given their small farm size, yields are often low at an average of 0.42 tonnes per hectare. Moreover, farmers struggle to access extension services which help to enhance farming techniques and boost yields. Low yields reduce the amount of income generated by farmers and prevent them from accruing savings.

The high cost of farming inputs also affects farmers’ incomes. The costs associated with hiring adult labour as well as purchasing fertilisers, farming equipment and pesticides places a large financial burden on farmers and further diminishes the income that they gain from cocoa production. In the 29 cocoa-growing communities supported by ICI in Ghana, only 36% of farmers could afford farming inputs.

The seasonality of cocoa farming means that incomes are not consistent year-round and cocoa farming families experience heightened economic vulnerability and deepened poverty during off-seasons. Few farmers are able to save money and many lack economic resilience strategies such as insurance or alternative income sources. Farmers must borrow money to cover household expenses and farming inputs for the next season, yet access to credit is limited in rural communities. These issues are exacerbated for women cocoa farmers who experience multiple barriers to cocoa production. As a result, they are required to take on additional labour by balancing cocoa farming with other income-generating activities.

With low earnings and weak economic resilience, cocoa farmers struggle to meet household needs. A 2010 study found that cocoa farming households’ expenditure, excluding farming inputs, exceeded their mean total income. This poverty has a direct impact on children in cocoa-growing communities. Children may engage in child labour because their parents cannot afford to hire adult labour. Additionally, children in poor cocoa farming households are less likely to attend school than their higher income peers. Despite the abolishment of school fees, expenses such as textbooks and uniforms remain financial barriers for poor families. Limited education perpetuates inter-generational poverty as households with uneducated heads are more likely to be poor.

There is great need for supports which assist cocoa farmers to strengthen their incomes and overcome poverty. ICI works in cocoa growing communities throughout Ghana to mobilise Community Service Groups which provide low-cost adult farm labour and to facilitate additional income-generating activities for women.

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